Reference no: EM132514584

Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 115,000 units per year. The total budgeted overhead at normal capacity is $747,500 comprised of $230,000 of variable costs and $517,500 of fixed costs. Byrd applies overhead on the basis of direct labor hours.

• During the current year, Byrd produced 81,600 putters, worked 95,000 direct labor hours, and incurred variable overhead costs of $132,600 and fixed overhead costs of $478,400.

Question 1: Compute the predetermined variable overhead rate and the predetermined fixed overhead rate.